Ed Gives Steve Land with an Adjusted Basis of $40,000

question 31

Multiple Choice

Ed gives Steve land with an adjusted basis of $40,000 and an FMV of $90,000. Ed paid no gift tax. Ed then inherits the same land back from Steve at Steve's death eight months later. At Steve's death, the land is worth $120,000. Ed's basis in the land becomes

• A) $40,000.
• B) $120,000.
• C) $90,000.
• D) cannot be determined from the facts given

---

Definitions:

Clock Radio

An electronic device that combines the features of a clock with a radio, often used as an alarm.

Substantia Nigra

Black nuclear mass in the midbrain; involved in coordinating movement and maintaining muscle tone.

Basal Nuclei

A group of nuclei in the brain involved in the control of voluntary motor movements, procedural learning, and emotions.

Tegmentum

Floor of the midbrain.